1. Field of Invention
This invention relates to the process of payments by and to streams of information for passage and transactions in computers, networks, and other electronic devices.
2. Overview
More units of electronic information are being produced, moved, processed, stored, accessed, and sold than ever before. Information flows are being handled by numerous transmission carriers, storage providers, processors, and content vendors, most of them operated by commercial entities. The information flows reach and interact with numerous devices. It is difficult for network firms and service and information providers to charge for their services, and for users and suppliers to monitor and control the numerous transactions that are required in moving, processing, buying, and selling of information
A few examples follow for the emerging complex system for informational transactions.
Storage networks—Unrelated users optimize storage utilization by linking hard drives and other storage devices.
Processing Networks—Computer users utilize the processing capacity of other unrelated computers.
Web Interaction—Websites are communicating and transacting with each other directly, without the human intervention of clicking etc.
Processor and sensor interaction—Transactions are moving from direct human control to those of delegated devices dealing with each other. For example, automobiles will be communicating directly with highways, air conditioners with utilities, etc.
Transmission Interaction—Information travels across transmission networks of various carriers, and various transmission media, depending on the rapidly shifting availability of capacity and price. The data packets comprising a single message could travel across different networks, and be passed on from network to network.
Information Trade—Much economic activity is taking place in buying, selling, and accessing information. Some information is sought by the user, for business or entertainment purposes. In other cases, the information is pushed to users and requires their attention and resources.
Priority Assignment Different streams of information require different priority in transmission, processing, etc.
Intelligent Agents and Software Robots. Software programs are being sent out by users to access data bases operated by other entities, to find information, and to bring it to the user.
As these examples show, the complexity and number of transactions involving information is growing, and many of them are outside of direct control and monitoring by humans or centralized machines. Too much of attention, transmission and processing capacity would be used up by each piece of information having to be controlled from the distance, report back, receive instructions, account for itself, etc.
With the increasing complexity of the information environment, it becomes necessary to create a method that would permit to conduct a numerous transactions in information and related goods and services quickly, under rapidly changing circumstances, and involving numerous parties, many of which do not know each other. Without such a transaction and payment mechanism many services would either not be provided or be inefficient in their provision. A way to engage in such transactions is to conduct them on the level of the information itself, to integrate the information with the transaction itself. And since information is increasingly moved and handled in the form of a set of binary information—“data packets”—this means that the transaction mechanism would be placed at the packet level itself.
To draw an analogy: the traditional method of informational transactions was like that for a freight train: the train moving across well-defined and pre-arranged paths, involving arrangements among a few firms, and with payments invoiced by a bulk bill. These kinds of arrangements are likely to remain for certain types of information flows, such as the distribution of live, mass audience video programming over cable television networks. In contrast, what is increasingly needed for information resembles a system of private vans, whose trained drivers pick their route with continuing reference to congestion (this is analogous to conventional packet switched communication), pay tolls and parking fees from their own wallet, find the cheapest route, buy gasoline, negotiate with the customer for payment for both delivery fees and merchandise, collect payments upon delivery, and deposit these payments at a bank.
3. Discussion of Prior Art
There is very little direct literature or patents that could be identified, though there are several related strands of related prior art.
1. General Systems of Electronic Money and Micro-Payments. E-Money schemes create secure ways to transfer and store money electronically, and to pay electronically for transactions. To deal with smaller transactions, a variety of micro-payment schemes have been proposed and patented. Because the amounts in question can be non-trivial, the encryption used in order to assure security tends to be fairly strong, and there is usually an element of human intervention in authorizing and specifying the transaction, or at least to control and monitor the transaction from a distance. These systems aim to create electronic money for an entire transaction, such as for accessing a song, reading an electronic magazine, or securing and relatively anonymous cash-like payment from pre-paid cards and similar devices. These schemes do not operate on the packet level, and do not assign information packets with the means and the ability to transact directly.
These patents include:
    U.S. Pat. No. 5,930,777 to Barber, 1999, Methods of charging for pay-per-access information over a network    U.S. Pat. No. 5,999,919 to Jarcki and Odlyzko, 1999, Efficient micropayment system    U.S. Ser. No. 06/029,150 to Kravitz, 2000, Payment and transactions in electronic commerce system    U.S. Ser. No. 06/072,870 to Nguyen, Haller and Kramer (2000) System, method and article of manufacture for a gateway payment architecture utilizing a multichannel, extensible, flexible architecture    U.S. Ser. No. 06/061,665 to Bahreman (2000) System, method and article of manufacture for a dynamic negotiation of a network payment frameworkLiterature references:    Chi, Ellis. Evaluation of Micropayment Schemes.     http://www.hpl.hp.com/techreportws/97/HPL-97-14.html, January 1997    Ferguson, Niels, “Single Term Off-Line Coins,” Proceedings of EuroCrypt '93, ftp.cwi.nl/pub/CWIreports/AA/CS-R9318.ps.Z, 1993    Kytpoki, Jari and Kapijoki. Vesa. Micropayments—Requirements and Solutions.http://www.hut.fi/˜vkarpijo/netsec99/, January 2000.    Schmidt Carsten and Rudolf Müller, A Framework for Micropayment Evaluation, Netnomics 1 No. 2, 1999. pp. 187–200
2. Allocation of Computing Capacity. A variety of proposals have been made for the allocation of scarce processing capacity, some with an economic dimension of payments or auction. Here, too, is the transaction for the processing capacity handled separately from the information that is to be processed.
Examples for such patents are:
    U.S. Pat. No. 4,727,487 February 1988 to Matsui et al, Hitachi, Resource allocation method in a computer system    U.S. Pat. No. 5,487,168 January 1996 to Geiner et al. International Business Machines Corporation, Method and system for global optimization of device allocation    U.S. Pat. No. 5,640,569: to Miller et al, Sun Microsystems, June 1997, Diverse goods arbitration system and method for allocating resources in a distributed computer system    U.S. Pat. No. 6,078,906, to Huberman, Xerox, June 2000, Method and system for providing a document service over a computer network using an automated brokered auction    U.S. Pat. No. 5,450,570: to Richek et al, Compaq, September 1995, Computer implemented method and apparatus for dynamic configuration of a computer system and circuit boards including computer resource allocation conflict resolution
3. Payment for Packet Switching.
Increasingly, digital information streams are being separated, for purposes of transmission over data networks, and for accessing computers and other devices, into a series of units known as data packets. Several protocols for packets exist. Traditionally each packet consists of a “payload” (the actual information to be transmitted) as well as an “overhead” that includes the address of the destination, as well as information about the source (the sender). More recently, the proposed protocol for the next-generation Internet protocol IPv6 includes a field in the packet to list the priority level. One recent patent could be identified for a payment mechanism for packet networks. It is for payments for transmission only, by a subtraction from a prepaid storage card. It does not provide for payments to other types of information transaction, or for payments to a packet rather than from a packet. It does not include the packet intelligence needed for engaging in transactions based on decision rules. And it has no provision for a differentiated treatment of packets. Thus, it is limited to toll payments for packet switched networks, and does not provide a general transaction mechanism for information.
U.S. Pat. No. 6,088,687 to Leleu, July 2000, Billing procedure and system for data transmission networks
An earlier patent provides for a still more limited payment system, of digital postage stamps attached to entire messages such as e-mail letters.
U.S. Pat. No. 5,771,289: to Kuzma, June 1998, Method and apparatus for transmitting electronic data using attached electronic credits to pay for the transmission.
One article was identified that discussed mechanisms of counting packets and settling among several partners. (Hardy and Tribble, 1995). That essay suggests, among several other issues, that any pair of adjoining carriers or other sites can transact with each other by establishing counters (accumulators) for packets traversing between their two adjoining sites, and a settlement system based on it among these neighboring sites. Somewhat contradictorily to this settlement system of sites with each other, there is also a provision for payment by a value card that is part of the information that gets routed. This system requires some preexisting limited trust relationship among the parties, and hence the number of participants with which any party can deal with is limited. Furthermore, the mechanism in question is not generalized for transactions of all kinds. It is used only for payment by the information, i.e., it is a one-way transfer. And it does not provide the packets with a means of intelligence to conduct transaction according to certain decision rules.                Hardy, Norman and Tribble, Eric Dean “The Digital Silk Road.” In Tulloh, William, Mark Miller, and Don Lavoie, eds. Agoric Systems: Market Based Computation, September 1995.        
4. Intelligent Agents. No patents could be identified for intelligent agent software programs that are also capable of payment for access, transmission, processing, or which carry means of payment for transactions they engage in.
5. By the Applicant. Noam, the applicant, in related papers, (1995, 1998) dealing with governmental spectrum policy, discussed the use of token-based access to the frequency spectrum, as an alternative to licensing requirements. That proposal was limited to wireless spectrum, using tokens issued by local clearinghouses of users, and did not include transaction intelligence, a two-way capability, or a generalizable transaction capability. Noam's papers did, however, spark his further thinking, and led to two unpublished talks about economic and policy implications of the integration of information and money, given in March and July, 2000. This then led to the development of the present invention.                Noam, Eli. “Taking the Next Step Beyond Spectrum Auctions: Open Spectrum Access.” IEEE Communications Magazine, December 1995, pp. 66–73.        Noam, Eli. “Spectrum Auctions: Yesterdays Heresy, Today's Orthodoxy, Tomorrow's Anachronism.” Journal of Law and Economics, December 1998. pp. 765–790.        